Representative Barney Frank seen on the Harvard University campus in May. Frank said this week that a bill proposing to cut the budget for a major financial regulator was evidence of "terrible priorities."

A proposal to slash funding for a major financial regulator is being met with strong criticism.

Representative Barney Frank, a Massachusetts Democrat and co-author of the Dodd-Frank Act, accused Republican lawmakers of having "terrible priorities" earlier this week, after the House Appropriations Committee released a bill calling for a 12 percent spending cut to the Commodity Futures Trading Commission, a regulatory agency.

"The fact that the Republican Party is lavishing money on weapons systems that the Pentagon does not want[,] while reducing the necessary funds for the regulation of derivatives, is a textbook example of terrible priorities," reads a statement from Frank's office.

The statement goes on to call the bill "a declaration of unilateral surrender to the forces of irresponsibility that wrecked our economy several years ago."

The criticism comes as regulators grow increasingly concerned about their tight budgets. Both the CFTC and the Securities and Exchange Commission, two of the most prominent regulatory bodies in the U.S. government, recently warned that they would need more funding if they were going to take on the job of policing Wall Street. SEC chairwoman Mary Schapiro said at a Congressional hearing in May that her agency is "way outgunned by the firms we regulate in terms of technology."

According to the Dodd-Frank act -- the 2010 financial regulatory law that bears Frank's name -- the CFTC is supposed to be responsible for regulating the $700 trillion market for derivatives, the financial instruments that played a key role in the financial crisis four years ago.

The CFTC hasn't assumed those duties yet, in part because regulators are still working out the precise terms of what does and doesn't count as a derivative. It's a daunting task. According to CNN, the derivatives market is eight times the size of the futures market, which the CFTC currently oversees -- and questions remain about whether the agency would be able to take on more work with less money.

On Thursday, Gary Gensler, the CFTC's chairman, said that the House Appropriations bill was proof that Congress "sides with Wall Street" on the issue of financial reform.

And Friday, Brooksley Born, a former chairwoman of the CFTC, told reporters that the proposed spending cuts pose "a serious threat to the country’s financial stability and to the welfare of the American public," according to MarketWatch.

Born cited the recent $2 billion trading loss at JPMorgan Chase's derivatives desk as evidence of the need for strong financial regulation.